The House and Senate chambers now have four measures aimed at reducing local influence in the controversial Industrial Tax Exemption Program.
After three hours of debate Wednesday, the Senate Committee for Commerce, Consumer Protection and International Affairs advanced without objection Senate Bill 214 to the full Senate for consideration.
Sen. Bodi White, SB214’s sponsor, and Rep. Franklin Foil, whose similar House Bill 529 awaits a hearing date, testified Wednesday that their protocol for deciding ITEP applications actually would allow for more local involvement. Both are Baton Rouge Republicans.
The bills would allow three representatives – chosen by the sheriff, parish leadership and school board — to sit on the Board of Commerce and Industry and vote on whether to accept a corporate application for a property tax exemption. Under the current rules, local tax jurisdictions have to approve the tax breaks.
Democratic Gov. John Bel Edwards three years ago changed the near-automatic acceptance of the tax exemptions in an executive order that linked the applications to job creation and retention. He also allowed local governments, whose tax revenues the state is giving away with ITEP, the ability to weigh in and even stop the application.
He also set the exemption at 80 percent, so the local governments would start seeing some income immediately, for up to 10 years.
The 80-year-old program raised considerable criticism because the state often rubber-stamped applications that exempted corporations from having to pay any local property taxes for 10 years.
“Was it abused in the past? Certainly,” White said. But, he added, ITEP also is one of the most successful tools economic development officials can use to attract new industries — and their jobs — to Louisiana.
Foil said SB214 doesn’t undo the governor’s authority to make the final decision on whether to grant the tax exemption. But the measure would take away the authority of local taxing jurisdictions to veto the applications.
“This adds another layer,” said Matthew Block, Edwards’ executive council.
The first test of a full chamber reaction to the changes to Edwards’ executive order could come as early as Thursday.
House Concurrent Resolution 3 is ready for a vote by the full House. The measure is like SB214 in that, instead of the full school boards and local councils voting, three members would make up a “local review board” that would take up the applications.
HCR3 was proposed by state Rep. Rick Edmonds, R-Baton Rouge.
House Bill 440, by Central Republican Rep. Barry Ivey, is a constitutional amendment that was officially accepted by the full House Wednesday. HB440 would return the local authority to the state but limit the exemption to 80 percent of the taxes owed for seven years.